Recession Tolls Heavy on Infosys as It Prophesies Major Drop in Revenues

Infosys Technologies, the second leading outsourcing company says that it is going to have a major reduction in its revenue generation in the fourth quarter. The blame for this prediction goes to the ongoing recession. The representatives of the company have informed that the revenue generation will reduce from 3.1 per cent to 6.7 per cent which means between US$4.35 billion and $4.52 billion in this financial year.

As most of the companies are trying to shrink their prices and expenditure, the same pressure can be seen transparently with Infosys Technologies. This can be well understood from the net profit made by the company in the fourth quarter which is exactly is 2.6 percent effecting $321 million and on the other hand, the full year net profit rose to 10 per cent effecting $1.3 billion.

Siddharth Pai, a co-worker at outsourcing consultancy firm TPI stated that it is evident that the outsourcing industry is going through a stormy night as many customers are postponing new contracts. Unless the customers welcome their contracts, an outsourcing company will not be making money. Recession affects the company’s hiring figure as well. Last year Infosys Technologies took in 18, 946 employees whereas the hiring figure till March 31 is 13, 663 only. That’s a vast difference which is the resultant of hammering effect of the shrunken global economy.